As many landlords’ buy-to-let dreams turn to nightmares, more people are working out the financial benefits of the opposite: sell-to-rent.
Rising house prices and cheap rents are undoing the buy-to-let dreams of many of Britain's amateur landlords – but are making more people consider the financial benefits of doing exactly the opposite: sell-to-rent.
Sell-to-rent involves exactly what it says: selling a property and renting it back. And for people who have built up equity in their homes during the last few years of rising house prices, it can make a lot of economic sense.
Many people are choosing to sell to rent because of financial necessity. Hit by five interest rate rises over the last year – the effects of which have been little eased by a recent Bank of England rate cut – the number of people in arrears on their mortgage is rising. Sell-to-rent gets rid of the mortgage burden without forcing people to move out of their homes.
Sell-to-rent: a discrete solution
Sell-to-rent can also keep any financial problems private. You don't have to move; the sale is conducted without any estate agents boards needing to go up and so can be conducted discretely, without anyone else needing to know about it.
Even people who don't need to sell are cottoning on to the financial benefits of sell-to-let. Many of them are worried about house prices falling in 2008, and think that now is a good time to sell. A sell-to-let deal will usually mean selling at less than the full market value of your property – but with the International Monetary Fund declaring in late 2007 that it believed UK house prices were overvalued by 40 per cent, that could still be more than your property's full market value by the end of 2008.
Sell-to-rent means equity release
Many people who have built up a sizeable amount of equity in their property are also considering exactly how to convert that paper profit into real money. While it is tied up in bricks and mortar, the reasoning runs, that equity is meaningless. And if you sell and buy another property, you won't have any cash left over unless you buy a smaller house – something that isn't an option for people with families. Sell-to-rent, however, lets people can cash in the equity that has been built up in their property.
And because rents are now often cheaper than mortgages in many cases, the sell-to-rent option becomes even more attractive. As well as getting a cash lump sum from the quick house sale, there is the potential to invest the difference between the old mortgage payment and the new rental payment, which can boost the coffers further.
Buy-to-let losses are sell-to-rent's gain
The fact that rents can be cheaper than mortgages is the problem facing many buy-to-let landlords. More landlords are finding their rental income doesn't cover their mortgages – meaning they're effectively losing money on what they thought was a guaranteed good investment.
The potential for those landlords to decide to sell their houses fast is one of the reasons why many experts are predicting a house price crash – and others are choosing sell-to-rent over buy-to-let.
Sell to Rent with selltorentltd.co.uk
If you're caught in a financial house-trap, selltorentltd.co.uk can throw you a life-line. Selltorentltd.co.uk offers a sell to rent back scheme for those who like living where they are and want to maintain stability but are facing mortgage arrears, repossession, bankruptcy and debt or concerned financial meltdown is looming. The sell to rent scheme is an alternative to selling up and moving, allowing you to stay put and find financial solutions. Selltorentltd.co.uk will buy your home and allow you to continue living in it as a tenant. Find out more, call Sell to Rent Ltd. today on: 08000 255 868